Markets are back in full swing in the first full trading week of 2013. The FTSE 100 is still above the 6000 mark and banks are having a whale of a time, rising strongly after European liquidity rules were relaxed slightly. If only the pesky U.S. budget could be sorted once and for all.

Against this background, the City’s number crunchers have been penning their views on Europe’s leading companies. So, if you’re looking for investment tips, here’s a taster of what they’re saying.

Bloomberg News

The first selection is from Deutsche Bank.

Deutsche Bank analysts are worried about the European utilities sector. Here’s what they said:

“The worst is yet to come. We see further downside earnings risk for generators in Central and Northern Europe where the market is pricing in the view that the structural capacity overhang will eventually be cleared. In our view it cannot without a fundamental regulatory overhaul, which looks unlikely.”

DB added that it sees no “safe havens” and only selected value in the U.K. and Southern Europe. It has downgraded Electricite de France, Snam, Terna, RWE and E.ON.

Switching sectors, the brokerage has upgraded British American Tobacco.

Caution is the order of the day in Europe early Wednesday as Apple’s earnings miss, Spain faces high borrowing costs, renewed concerns emerge about Greece and a decision to put the EFSF bailout fund on ratings watch negative outweigh news that the Fed is moving closer to QE3.

The analysts have been up bright and early scouting around for stocks they like and dislike and penning the reasons why. Here’s our pick of this morning’s pile.

There may be a lot of doom and gloom surrounding the single currency these days, but the weakening euro against the U.S. dollar is of distinct benefit to Publicis, according to HSBC. The U.K. bank has upgraded the French multinational advertising and public relations company to overweight from neutral, stating that it’s taking full advantage of its U.S. coverage.

• The European telecommunications sector has been much in focus Wednesday, ahead of the upcoming fourth quarter reporting season. Deutsche Bank downgraded France Telecom and Royal KPN both to sell from hold, and Iliad Group to hold from buy.

The bank expects weaker results or guidance disappointments from these companies, so expects them to underperform peers.

On the flip side, Deutsche Bank upgraded Belgacom to hold from sell, citing a healthy balance sheet with no major refinancing due before 2016.

Credit Suisse has also taken a more positive stance on the Belgian telecoms company, stating that pressure from cable operator Voo is likely to ease off. The Swiss banking giant also downgraded Tele2 to neutral from outperform on slowing momentum in its Russian market and Portugal Telecom to underperform from neutral, reflecting increasing pressure on its fixed line offering.

Finally, UBS downgraded BT Group to neutral from buy, largely on pension deficit concerns and Telefonica to sell from neutral, on concerns over the positioning of its short message services.